updated 8/26/2005 6:18:53 PM ET 2005-08-26T22:18:53

Pixar Animation Studios Inc. said Friday that it has received a request for information from the Securities and Exchange Commission, a move that comes less than two months after the SEC made a similar request of Pixar-rival DreamWorks Animation SKG Inc.

Emeryville, Calif.-based Pixar, which makes animated films such as “Finding Nemo” and “Toy Story,” declined to say what regulators wanted. But in a brief statement the company acknowledged it had received “an informal request for information from the SEC, as companies do from time to time, and we believe we have fully complied with that request.”

Analysts who cover Pixar suspect that the SEC wants to learn more about why DVD sales of the movie “The Incredibles” fell short of expectations and whether the company should have notified investors sooner.

The shortfall in DVD sales was largely responsible for the company missing its second-quarter earnings forecast, according to a report in Friday’s edition of the Wall Street Journal, which cited unidentified sources.

DreamWorks, which twice cut earnings forecasts, announced last month that the SEC had begun a probe into the trading of its stock and release of its first-quarter results.

The probe was launched after Glendale, Calif.-based DreamWorks offered rosy forecasts for DVD sales of “Shrek 2” and failed to deliver, analysts say.

The government is also looking into whether DreamWorks should have been quicker to inform investors that “Shrek 2” sales were not meeting expectations, the Journal reported.

A DreamWorks spokesman said the company is cooperating with the SEC.

DreamWorks missed first-quarter profit estimates due to disappointing revenue from home video sales of “Shrek 2.”

Likewise, Pixar said it would miss second-quarter estimates because of lower-than-expected demand for “The Incredibles.”

Pixar reported on Aug. 4 that it earned $12.7 million, or 10 cents per share, in the second quarter compared to $37.4 million, or 32 cents per share, a year earlier. Revenue fell to $26.4 million from $66.3 million.

“The big question is, when did these guys know things were going wrong and when should they have told everybody,” said Dennis McAlpine, managing director of McAlpine Associates LLC.

The SEC often requests information from companies, and it does not necessarily mean that laws were violated.

Harold Vogel of Vogel Capital Management said neither company should suffer long-term effects from the probes, but DreamWorks has more to answer for than Pixar.

DreamWorks overestimated “Shrek 2” DVD sales by between 3 to 5 million copies, which “knocked yearly earnings estimates down 30 to 40 percent,” Vogel said.

“If you’re an investor, that’s significant,” he said.

DreamWorks is also beset by a series of shareholder lawsuits alleging the company misrepresented potential DVD sales.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com